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The Health Resources and Services Administration should increase its oversight of private nonprofit hospitals that participate in the 340B drug savings program to ensure they meet eligibility requirements, the Government Accountability Office said in a released today. Specifically, GAO said HRSA should ensure that it uses reliable information to verify nonprofit status for all nongovernmental hospitals in the program, verify that each of these hospitals has a contract with a state or local government as required, and verify that the contract was in effect prior to the beginning of the audit review period. GAO also recommended that HRSA revise its contract audit procedures and provide auditors with more specific guidance on how to determine whether the contracts require the hospitals to serve low-income individuals not eligible for Medicaid or Medicare. In comments in the report, the Department of Health and Human Services concurred with all of the recommendations except the one to verify that all nongovernmental hospitals have the required contract with a state or local government.
 
AHA Executive Vice President Tom Nickels said, “We look forward to reviewing this report closely. Most important is that tax-exempt hospitals are accountable to the government and their communities in a variety of important ways. For example, they publicly report annually the benefits they provide. In the most recent year for which comprehensive data is available, 340B tax-exempt hospitals provided more than $56 billion in total benefits to their communities.”